It is irrelevant how they poll. If they want to get prior to the next election anything through parliament they will need NZ First support.
And pretty sure Winnie will remember his clientele - particularly with the next election approaching soon.
Printable View
https://www.newsroom.co.nz/2019/03/2...-cgt?preview=1 44% in favour 35% opposed, thats decent majority.
“Professionals and senior government officials were the most in support”
Would that be because they would profit from the extra compliance costs that will be inevitable? Or, that they would be better placed to find and benefit from the inevitable loopholes?
I would like to see the level of support from the high income subset with an exempt yet very expensive house but no other assets.
It was an ommision that the poll breakdown into owners of assets did not include the support level of those with an exempt principal home asset. Owner occupied housing is a significant class of asset ownership in NZ. They could be well be beneficiary of the proposed TWG scheme.
There is the TWG report and its recommendations. The ToR were provided by the government so we the people could assume some or all of the recommendations will inform the policy to be announced in April. We could all keep quiet and accept what we are dished up. Good idea?
In practice there has been some seriously robust debate on the TWG report, and the government might take a bit of notice.
Tax Justice Aotearoa NZ. Read their ad in the herald this morning and agree with a lot of what they say but the name and colours make them sound like a cross between the Greenies and Maori parties. A lot of "out there" people in that crowd.
Campaign supporters include the Public Health Association, New Zealand Council of Christian Social Services, Council of Trade Unions, Public Service Association, Hui E! Community Aotearoa, Equality Network, Closing the Gap, Poverty Action Waikato, and UCAN (United Community Action Network).
Of course not, but so much of what I have read is simply blind criticism containing all sorts of wild assumptions, as though it was all done and dusted. I can't see anything wrong with constructive discussion on CGT or any other subject. To repeat my original statement 'With no details of a CGT scheme available yet, it's hard to see how anyone can be for or against it.' That does not preclude constructive comment.
Gone!
Looks like jacinda does not have the stomach to roll the dice on an early election.Would have been interesting to see the results.I suspect winnie would have picked up a stack of votes from the nats
Don't see your reasoning here. Winston has lost votes since the election which probably never went to National, since they have also lost votes. So they will just come back from where they went which is likely Labour due to the fact they are the only party to have increased their votes in the polls.
https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12223514
Lizzie Marvelly: Forget capital gains tax, we need a new plan
https://www2.deloitte.com/nz/en/page...ns-tax-nz.html
Is a capital gains tax right for New Zealand?
https://www.stuff.co.nz/business/109923112/capital-gains-tax-whats-fair-for-one-person-may-hurt-another
Capital gains tax: What's fair for one person may hurt another
https://www.marketwatch.com/story/why-raising-taxes-on-the-rich-isnt-so-crazy-2019-12-09
Wealth taxes wouldn’t destroy the economy — they’d make it better.
The economy would benefit directly from a more equal distribution of income because middle- and low-income families spend a greater portion of their incomes than the very rich do, so more money would recycle through the economy.
Inequality of wealth creates other problems. The top 1% are socking away a greater share of the nation’s wealth; so much so that regular Americans are starved for the capital they need to buy homes, invest in schooling and start new businesses.
Are taxes on the rich unfair? The poor are constantly being reminded that life isn’t supposed to be fair. Get over it.
The US already has already addressed taxing the wealthy. It's called the Estate or Death Duty tax which kicks in on amounts over $11 Million USD.
Article says the top 1% need to pay more? I agree they do. But in NZ, let's be real, how wealthy are the top 1% of NZ residents? I would say.. not so wealthy, definitely not when you compare income levels of the upper middle class in the US. There would be only a handful of NZ rich that are in the $500K/year income? Whereas in the US in that 1%, you're going to find a lot more earning that kind of money.
If CGT is implemented, then the NZ gov't & IRD need to consider removing existing taxes such as FIF (on those with overseas assets). The biggest impact CGT would have is the Kiwi Saver scheme ; it would mean NZ's tax code would look more and more like how the IRS and Australia and most other nations with CGT, address taxation.
Can you verify that "only a handful"
The previous govt took away the kiwisaver tax credits and original 1k contribution. This would have had more of an impact on KS
The tax free status hasn't done much to encourage domestic savings and foreign ownership picks up the "huuuge" NZ investment shortfalls.
Once again you spew misinformation or straight out lies. Are you paid by the Labour Party to do this ? You should disclose if you are.
The KS tax credits are still in place but at a lower level than they were.
The Government should in my view totally stop contributions to people´s KS accounts now that the Government´s books are in such a serious negative state.
He/she has been called out several times in the last little while with straight out misinformation, making statements that are simply not based on fact. Yet it continues. It doesn´t matter whether I agree or disagree. His/her statement is simply not factual.
Edit: But I do take your point moka about my post being unnnecessarily harshly and personally worded, which is something I always try to avoid in comments on this site. Pointless editing it though as I can not edit your quote of it !
I've found not data for NZ but not surprisingly, the US data here:
https://www.investopedia.com/persona...ou-top-1-5-10/
Annual Wages of Top Earners
The latest data from the EPI show that in 2018 annual wages for the top 1% reached $737,697, up just 0.2% compared to 2017.
I think it's fair to say when it comes to the top 1% of earners, NZ's 1% wouldn't be near this US figure.
Not sure about the tax free status of KS. Tax unfortunately isn't a well discussed topic among NZ financial advisors. I don't see how they can provide any meaningful advice to clients without breaking down the tax that listed corporations pay, and the tax on dividends that shareholders receive (if not partially input credited), and FIF tax if the shares are foreign based. If there's one thing certain, Kiwi Saver has been a landfall money maker for IRD. This is very different to the tax approach to share investments in the US & Canada where on most part, small investors have the ability to invest tax free (ie ROTH IRA):Quote:
The previous govt took away the kiwisaver tax credits and original 1k contribution. This would have had more of an impact on KS
The tax free status hasn't done much to encourage domestic savings and foreign ownership picks up the investment shortfalls.
https://www.youtube.com/watch?v=q63F1pBrUHA
Neither gov'ts in NZ have proposed what assets would have CGT - nor how it would impact other investments - Kiwi Saver? it's not that easy of an issue to clarify because NZ has come form an unusual stance of having no form of tax on capital gains.
There is a portion of Kiwisaver, maybe the majority, where tax isn't paid since its a capital gain.
Also keep in mind that it cannot be retrospective which means that you keep all of the existing gains to the current date which is quite fair.
If we are talking about capital gains tax or taxing the wealthy then we should be looking at wealth not income. Apart from a few well-paid CEOs the way you get wealthy in NZ is from capital gains, not income. And yes Estate or Death Duty tax should be re-introduced.
https://www.stuff.co.nz/business/mon...-will-tell-you
It shows the top 1 per cent of individuals owned around 20 per cent of the country's wealth at the end of June 2018, and the top 10 per cent owned 59 per cent of the country's wealth.
I don't really agree with either. The gift duty can be changed though so people can't switch between structures to avoid tax as easily. sadly its another legacy item from sir john and sir bill to resolve.
Move to stop all the tax avoidance so people pay what they should be paying here instead IMO.
Managed KiwiSaver funds pay taxes in the same manner as paying corporate taxes (this is what a financial advisor told me at a neighbourhood gathering). If this information is wrong then I stand corrected. The shareholders have a RWT to account for dividend payments which is treated differently than taxing of the gains. To bring in a CGT, there needs to be consideration of already existing taxes on gains in different asset classes. For eg. if a person is day trading shares (or frequently buy / sell like managed funds do ; with the INTENT of profit), then the gains are taxed at full income / corporate rates.
What's the most compelling issue i've found with financial advisors in NZ is a lack of consensus on advice. This is very different to what i've seen in Canadian afternoon TV hosting 'Finance Talk' programs to educate the public, and what these financial advisors say is pretty much widely accepted. Here's one perspective of a NZ advisor:
https://nestegginvestments.co.nz/ind...-always-taxed/
"This different tax treatment is sub-optimal, and unfair for NZ based funds. But until this situation changes, from a tax perspective only, it is preferable to hold international shares via foreign-based funds (or direct investments in overseas companies). "
Of course no financial advisor gets a commission telling clients to invest directly by themselves or choosing the lowest cost option of owning shares 'outside of a managed fund'.
So the issue whether CGT is taxed 'retrospective' or not is of no difference, the NZ investor is already paying taxes on their investments in so many different ways. Perhaps Jacinda Ardern didn't realise this and at the time she looked at making a decision to bring in CGT or not, she found out she couldn't arbitrarily single out CGT on the residential property market.
While i'm not against taxation, why is it no one really addresses 'how much taxes' should a person pay in NZ? In my recent post here I made the comparison of the top 1% earners in NZ vs the 1% in America. What NZ politicians seem to miss out is how much more is expected out society to pay in taxation?
Perhaps question why NZ Gift Duty and NZ Estate Death taxes were removed in the past? I think the answer was more along the lines of NZ's failing brain drain and flight of capital overseas. You had NZ charities that struggled because of the Gift Duty that limited donors from achieving anything (I recall Jane Cameron ex-Katmadu wanting to make a generous gift in NZ but ended up moving to Australia). We live in a global world and there are no laws 'yet' that stops a person from declaring non-residency in NZ (so easily achieved by just flying to Australia). Where I grew up in Canada, a decision to declare non-residency is not so easy achieved because one can't simply say they just want to move to another country. A green card or residency visa is required in the US if a Canadian wants to live there. It's not so simply as a Kiwi hopping on a plane and flying to Australia when ever they want to.
So this brings back to my original point, if you want to compare the top 1% of the people in NZ, look who they are? Are they really make a lot of money or wealth? More importantly, are they the LAST egg left which Jacinda Ardern has been cautious about imposing CGT (or any new tax) to them? Believe me, Canada has had it's fair share of wealth leave the country throughout he 90s and 2000s (mostly due to brain drain and the wealthy sending their assets abroad).
As I said before, what level of taxation is acceptable? NZ gov't has to be very cautious about this because again, we live in a globalised world. Residents will find out that they had enough and will leave. The US has all of the above (gift tax, death duty, etc..) but like their income tax brackets, the thresholds to be paying a lot of tax is way way up there. To be in the 1% top earner, one needs to be well over $500K a year income, in addition to also having capital gains tax. But for the vast majority, and i'm talking those that have enough after-tax disposable income to pay for medical insurance, they can structure their finances so they pay very very little taxes.Quote:
@ Panda-NZ: I don't really agree with either. The gift duty can be changed though so people can't switch between structures to avoid tax as easily. sadly its another legacy item from sir john and sir bill to resolve.
Move to stop all the tax avoidance so people pay what they should be paying here instead IMO.
So I ask again, how much taxes should a NZ resident be paying? More specifically, how much should the top 1% should be paying in NZ? Because these groups of people are the most likely to move to more tax friendlier places like in the US (as what we've recently seen from the EU's hunt for taxes).
I guess the FIF regime is supposedly an “income” tax. Even if in some years the use of the 5% “Fair dividend” rate is in effect a tax on imputed income, where there has only been a increase in unrealised capital gains without any dividend paid during the year. I guess this may result in the taxpayer selling down their overseas investment to pay the tax levied on unrealised returns on the investment. Would CGT be in addition to that when it comes to FIF investments?
NZ is on track to reaching the American levels of wealth and income of the top 1%. Disparities are growing. We currently have no death or estate duties, plus no stamp duties, comprehensive capital gains or capital taxes. Wealth is increasingly becoming concentrated in the top circle of families....
Every country will be looking to raise taxes soon. These views are pretty out of date, you may not have noticed the huge numbers of skilled people busting down our doors atm to come in. It will be even more in the future as climate change causes resource and water shortages. Taxes are way down the list.
We need a fair return from these people.. How much should they pay? more than 0% for a capital gain.
Yep, this was the issue I brought up last year when Jacinda had this TWG discussion - what would be done to the existing NZ investments made in pension funds etc that already paid taxes? It was clear what the public wanted in NZ (the Labour voters) was a tax on residential properties. Too many of the rich had come from owning large portions of real estate in NZ but Jacinda, in her mind I suppose just couldn't do it. As the TWG suggested it could lead to political suicide or worse, a huge flight of NZ capital to abroad - if NZ's real estate market collapsed, it would have huge repercussions on NZ's bond rating and monetary / fiscal management on the global level.
I do agree in NZ, the disparity gap between the rich and poor is growing. A good proxy is look at all the private schools and how much they charge rich families that send their children there. It's an issue and commitment i'm not use to as I grew up in Canada. Private schools in primary & secondary are rare and only for the ultra elite and they still ended up attending the same universities around Canada. The compelling distinction I learned was Canada having the top 1 or 2 rank of 'attainment' levels in the world (ie. those carrying on to post secondary education) ; it's not the result of being rich or poor but rather, their public education must be doing something right.
That may be true - but I would put my $ on it that America would be the place to raise taxes the least for the simple reason, they have the buffer room. Places like NZ and Canada, if they impose more taxation, the result would be quite devastating. Remember the laws around gifting and moving assets around? Don't forget, the US has the advantage of bank secrecy laws (absence of CRS and impenetrable of NZ's FMA regulation laws).Quote:
@Panda-NZ-: Every country will be looking to raise taxes soon. These views are pretty out of date, you may not have noticed the huge numbers of skilled people busting down our doors atm to come in. It will be even more in the future as climate change causes resource and water shortages. Taxes are way down the list.
We need a fair return from these people.. How much should they pay? more than 0% for a capital gain.
Who are the people that are busting down the doors to get into NZ? From what I can see, they certainly are not the rich. It's already been proven that of the elite Chinese wanting to get of China, their top destination is the US or Australia:
https://youtu.be/qP-lnn-kwPA?t=154
Just like in the education wrap, those that don't get accepted into Cdn or American universities, they work their way down the list to the next country - NZ gets the left overs.
The question should be "what sort of country do we want". If you value health, education, a clean environment, well trained police officers, minimally corrupt officials etc it must all be paid for. And if you think outsourcing things is cheaper note that the US Govt still spends a lot per capita on health (cant remember the figures but more than some OECD countries where health is free). So the answer is probably something like tax needs to somehow reflect spending and if residents decide they dont like paying "too much" tax despite enjoying the benefits and depart then good riddance.
Which does nothing to address the issue of the proportion of tax that should be paid by individuals. What rate for each individual represents a "fair share" of the burden for these services? Let's put aside the separate and very subjective argument of which specific services and what level of services are essential.
Au contraire, context is everything otherwise no need to step outside the poll. CGT is expensive to administer, burdensome and relatively easy to fiddle. To expand the existing CGT it begs the question "why?" If it is merely revenue, increasing GST is far more efficient and its difficult to (legally) avoid. Plus it hits the wealthy harder if that is one's goal. Alternatively rolling out user pays might achieve the same goal (and negate the need for any new taxes). The Q how much an individual should pay absolutely, via what means and how much relative to another person, or corporation, is thus very much linked to what an individual gets/expects in return (micro and macro). It obviously gets very philosophical.
One simple line of code:
Sale_price - purchase_price * tax rate.
It's almost too simple which is why every country has it in place. for comparison the IRD's GST guide is 100 pages and nearly every business is required to know how to fill in the seperate form (sounds complex), know what to include in it as a taxable supply, what they can claim, make a number of adjustments, maintain their invoice records which have a company's GST number on it for multiple years somewhere.
This raises admin costs when you have to file two monthly rather than once for income. More of the economy is shifting towards capital and less income so it's also needed from that perspective if you are to maintain a tax base.
The fair share to be paid by individuals is determined by how much they earn e.g. PAYE on wages and salary, or tax on interest or how much they spend i.e. GST. Tax is paid on what you receive in income and capital gains.
Tax is not calculated on what a “fair share” of the burden for these services.
It sounds like you are trying to rewrite the tax laws. The more you receive from the “common wealth” of a country, the more tax you pay. The “common wealth” is what every citizen in a country inherits from the efforts of our forebears over the years. If you accumulate income and wealth then you should pay tax on it. If you are in business you benefit indirectly from all government funded services that support your business, your employees, and your customers. It is not just what you as an individual use. You are an individual and you are also part of a community. The community provides services such as education, health, social welfare, justice etc which all provide the infrastructure for a healthy society, which enable you to run a profitable business.
...just like AirNZ's spreadsheet is revenue-expenses * tax rate.
Devil is in the detail.
We have a half decent CGT that charges people at their top rate, not the usual 15-20% mooted. It's just tricky for IRD to prove intent... a tweak to move onus onto the tax payer to prove intent (or lack thereof) would go some way to addressing that without too much political hoo-ha.
I agree with you. That's not the point I'm making though. What I am questioning is the all too often repeated orthodoxly that everyone must pay their fair share of tax. What is this fair share? How do we calculate it? It's completely subjective and those that repeat the line invariably can't come up with objective measures. It appears to be a line used to bludgeon those who believe others have accumulated too much wealth.
How do you know CGT is expensive to administer? Put that question to every other OECD nation that has CGT?
As I mentioned before, you have to assess the FULL tax impact in NZ. Everything from how much corporate taxes are paid, how much tax on dividends and interest, how much income taxes are paid, and how much consumption taxes like GST is paid. I still find for many posters here, they don't know the difference between taxes on 'consumption', taxes on income, and taxes on gain in asset value such as shares and hard assets like real estate. They are NOT all the same.
The wealthier have 2 choices to level the disparity field. Pay more taxes or give their portion of wealth back to society. Many would agree, the former is not nearly efficient as giving to charity. Gov't bureaucracies always creates inefficiencies. After all where did the money come from? No one questioned how the wealthy obtain their wealth from? If it originally came from society, then it's more fair to for them to contribute it BACK to society. I'm not saying they should give ALL of it back, but it's very fair that since they obtain a larger portion of wealth, they have a duty of care to give a larger portion back to society.
How does gst hit the wealthy harder. I would have thought that the Wealthy save and invest a much greater proportion of their income. Consequently a financial transaction tax/stamp duties would be the way to go and perhaps easier to administer than a GST. Stamp duties on the sales and purchase of investment properties and/or a land tax would perhaps be the easiest to administer and would help relieve the burden from those who rely solely on salaries/wages/dividends/interest.
I guess what is “fair” is determined by “the people.” If people consider that some segment of society is benefiting excessively from the “common wealth” then governments will be voted in to change that - or - if governments refuse to change the status quo revolution will occur. Obviously at the moment the status quo means that income and the cost of subsistence is taxed heavily and leveraged long term land-based investment has a less onerous tax burden. How long that lasts depends on how long “the people” will put up with it. For how long will “the people” accept the shift to a greater concentration of wealth at the top?
It's definitely subjective as you say and it seems to me that a lot of people deem it to be 'fair' when the burden falls on anyone but themselves. For all that I find it hard to argue with a flat rate - i.e. every dollar earned is taxed at exactly the same rate - double your income will double your tax. That's my idea of fair. It also has the added advantage of not being a major disincentive.